Agency conforming loan limits for the first three quarters of 2011 have been set by the Federal Housing Financial Agency (FHFA), and, for the third year in a row they remain unchanged.  In most of the U.S. the maximum loan will remain $417,000.  In what are considered to be high property value areas the maximum remains $729,750 but actual loan caps are determined on a county by county basis.  These loan limits apply to loans originated for purchase by Freddie Mac and Fannie Mae and for guarantee by the Federal Housing Adminstration (FHA.)  The guidelines are usually also utilized for VA guaranteed loans.

The maximum figures, will apply to all mortgage loans originated before September 30, 2011 and are determined by rules established by the Housing and Economic Recovery Act of 2008 (HERA) and the Economic Stimulus Act of 2008 (ESA).  ESA limits are fixed dollar amounts whereas HERA limits must be calculated each year based on local area median home prices.  Each year the HERA calculation is compared to the ESA limit and the higher number, which in most cases was the fixed ESA calculation, prevails.  Even where the ESA cap of $625,500 is the lower of the two calculations, the Federal Housing Finance Agency (FHFA) has followed its existing policy that permits limits to be revised upward or remain unchanged; they cannot drop.   Thus, despite the substantial downward drift of home prices in many areas, the loan limits remain, in most cases, unchanged.

For mortgage loans originated after September 30, 2011, the ESA rules will be used to determine limits and the maximum of $625,500 will apply.

The second mortgage loan limits for 2011 is set at $208,500 for purchases in the contiguous United States and $312,750 in Alaska, Guam, Hawaii, and the Virgin Islands.  The sum of the original loan amounts of the first and second mortgages, however, cannot exceed the maximum loan limits for senior liens in the applicable location. 

Where a mortgage has been modified, it can only be resold to Fannie Mae if the original loan amount did not exceed the current loan limits even if the balance was paid subsequently paid down below that amount.  

HERE is a tool to determine the max agency loan amount in your county